When we design a goal and set up a budget to achieve it, it is very difficult to get the exact amount right, so it is important to work with a safety margin.
Imagine a Google Ads campaign for a law firm specializing in Real Estate Law. In the first quarter of 2017, if the firm invested R$3,000 per month in media, its average CPC (cost per click) was R$2.50 (1,200 clicks) and it converted 2 new clients per month. In other words, it took 600 clicks (R$1,500 investment) to acquire a new client.
If in 2018, your new goal is to acquire 4 new customers per month, iran phone number resource looking at the campaign history, it would be enough to invest double, R$6,000 in media investment, which would already be enough.
When you rely on your previous budget, you certainly don't have 100% accurate data. In our example, the campaign's keywords increased because more companies started investing in similar campaigns, and the CPC went from R$2.50 to R$2.80 — an increase of 12%.
In this new scenario, it would be necessary to invest R$1,680 to acquire a new customer (R$2.80 x 600 clicks) and no longer R$1,500 (2.50 x 600 clicks). This is based on the assumption that, in 2018, the conversion rate of 600 clicks to a sale will be the same, which we know can also vary.
How to work with the safety margin?
The idea of working with previous results is basically to have an average, and not a certainty. Therefore, it is very important to include a safety margin, so that the marketing budget is not compromised . In this sense, a margin of between 15% and 20% of the suggested value is ideal to keep it organized.
It is worth noting that the investment assumption does not suit all companies in the same way. In this case, the methodology works best when it comes to medium and large organizations.
In small businesses, the ideal is to assess demands based on the available resource limit, as there is often no possibility of having a margin.